Maruti Suzuki India Ltd., India’s biggest automaker by sales volume, will increase local content in its cars as the rupee’s decline pushes up the cost of imported components.
“The rupee’s fall is adversely affecting us as we’re a net importer,” Ajay Seth, chief financial officer at the New Delhi-based company, said in a telephone interview. “We will continue to aggressively localize sourcing; it’s not going to happen overnight.”
India’s rupee plunged to a record low after the Federal Reserve signaled it is prepared to start phasing out its stimulus program that has boosted inflows to emerging markets. The automaker, whose import costs were equivalent to about 20 percent of its sales, has currency hedges only till the end of June, according to Seth.
Shares of the Indian unit of Suzuki Motor Corp. fell 2 percent to 1,512.70 rupees as of 11:39 a.m. in Mumbai trading.